Gold prices have dropped significantly, with the yellow metal recording its biggest weekly decline in decades.
According to Trading Economics, gold is now trading at US$4,345 per ounce, down 3.18%, after slipping below US$4,400 during the latest session. The move caps off a steep weekly fall, marking the largest drop since 1983.
The pullback follows a strong run earlier in the year and has left prices down more than 15% in the past month.
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Oil, yields, and the US dollar hit gold
Gold's sell-off comes as markets adjust expectations for inflation and interest rates.
Brent crude has surged to US$112 a barrel, up roughly 55% in a month, as the Middle East conflict raises supply concerns. At the same time, the US dollar index has pushed towards 100, while US Treasury yields have climbed to multi-month highs.
These moves have tracked the weakness in gold.
Markets are also pushing back expectations for near-term rate cuts, with cuts now expected further out. Market pricing now points to fewer cuts in late 2026, with central banks remaining focused on inflation.
Why one fund manager sees a buying opportunity
Despite the recent fall, some in the market see the pullback as an opportunity rather than a warning sign.
According to The Australian, VanEck's head of investments and capital markets, Russell Chesler, commented on the recent weakness. He said it reflects short-term macro pressure rather than a change in gold's long-term outlook.
Chesler highlighted continued central bank buying, elevated geopolitical risk, and persistent inflation pressures as key supports for the metal.
Central banks have been steady buyers of gold in recent years, helping support demand even during periods of volatility.
He also pointed to rising government debt levels and the risk of slower global growth, which have historically supported gold prices.
He believes the recent decline may offer a more attractive entry point following the strong rally earlier in the year.
What to watch from here
The next move in gold is likely to come down to interest rate expectations and the direction of the US dollar.
Any further strength in the dollar or another move higher in bond yields could continue to weigh on prices in the near-term. Oil prices will also be in focus, particularly if supply disruptions in the Middle East persist.
At the same time, central bank demand remains a key factor to watch. Recent years have seen consistent buying, which has helped support prices during periods of weakness.
The key question is whether these conditions persist. Changes in rate expectations and currency movements are likely to drive the next move in the gold price.
